Temp agencies fight proposed 5% payroll tax -... -
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Published on: 5/16/2003
Last Visited: 5/17/2003
"This bill would kill my business overnight," said David Landry, chief executive officer of The CalStaff Cos., the fifth-largest staffing agency in Sacramento.
Most of CalStaff's applicants are looking for permanent positions and use staffing services to find them, Landry said.Since 1970, the company has placed more than 35,000 people into "well-paying careers," he added.
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CalStaff lost money last year due to the downturn, a hike in workers' compensation rates and a desire by Landry to keep his staff intact.Gross revenue dropped to $5.3 million in 2002, down 25 percent from $7.1 million in 2001.
The proposed law goes far beyond CalStaff, Landry said.If staffing companies have to pay the tax, either their clients will pay more or their employees will earn less.
"The first to feel its impact would be those at the bottom of the job pool: Unskilled labor, entry-level administrative applicants, previous welfare parents that need a chance in an entry-level position and those who need to transition into a new career or industry," Landry said.
Small business -- the largest segment of CalStaff's business -- would suffer because it relies on staffing companies to provide recruiting and screening resources that small employers cannot easily afford, Landry explained.